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Think Asia, Invest Thailand
Ms. Ajarin Pattanapanchai Deputy Secretary General
Thailand Board of Investment February 2012
Thailand in Brief
Note: Exchange rate CA$1=Bt30.84 in 2011
Region: Southeast Asia Population: 67.8 million Literacy Rate: 96 % Religion: Buddhism 95 % Labor Force: 39.5 million Per capita GDP(2011): CA$5,056 International Reserve: US$138.4Bil.
ECONOMIC PROJECTION YEAR 2012
(% YoY) 2010 2011 2012 Projection
GDP (at 1988 price) 7.8 0.1 5.5-6.5
Export of goods (US$) 28.4 16.4 12.8
Volume 17.7 10.2 11.8
Import of goods (US$) 37.0 24.7 22.3
Volume 26.8 13.3 16.5
Current Account to GDP(%) 4.1 3.4 0.7
Inflation 3.3 3.8 3.5-4.0
Unemployment rate 1.0 0.7 0.7
Source: NESDB as of May 21, 2012
2nd Largest ASEAN
Economy
35th Largest Global
Economy
33rd Largest Global
Exporter
19th Largest Global
Manufacturer
Global Ranking
2010 2011 2012 (Jan-Apr)
Automotive and parts 17.71 16.98 6.32 Computer and parts 18.84 17.06 6.03 Refine fuels 7.80 10.09 4.22 Precious stones and jewelry 11.65 12.30 3.93 Rubber 7.90 13.18 3.34 Rubber products 6.43 8.39 2.79 Plastic resins 6.34 8.80 2.73 Chemical products 5.78 8.29 2.66 Integrated circuits 8.07 7.91 2.10 Machinery and parts 4.88 6.11 2.05 Others 99.91 119.70 35.40 Total 195.31 228.83 71.56
TOP 10 EXPORTS IN 2009 – 2012 (Jan-Apr) Unit: US$ Billion
WHY THAILAND
Thailand: Highly Ranked #3 in Asia Public Sector Efficiency
#4 in Asia for Corporate Governance
#10 worldwide as priority FDI host country
#17 worldwide for Ease of Doing Business #3 Easiest Place in Asia to Do Business
Top Destinations for Expat Experience 2012 (HSBC)
1. Thailand
2010 COL Survey (Mercer) • Thailand 121st lowest cost
Source: Expat Explorer Survey 2010, HSBC asnd Mercer Consulting
Thailand offers Best Expat Experience and a Low Cost of Living
AFFORDABLE OFFICE SPACE
122.33
106.38
80.97
54.0743.22
2819.9924.79 23.82
0
20
40
60
80
100
120
140
Tokyo(Inner
Central)
Mumbai,India
Singapore Shanghai(Pudong)
Ho ChiMinh City
KualaLumpur
Bangkok Guangzhou Manila
Tota
l Occ
upat
ion
Cos
ts
Dol
lar
/ Squ
are
Foot
/ Ye
ar US$
Source: CB Richard Ellis, Global Office Rents, Q1, 2011 Note: Exchange rate US$1 = Bt30.49 in 2011
WAGE COMPARISON INDEX 2011
42.03 41.0436.98 35.4 34.81
17.9 17.6 14.54 13.559.39 8.6 7.32 6.82
79.4
0102030405060708090
100
Tokyo
Seoul
DubaiTaip
eiSing
apor
eHon
g Kon
gKuala
lumpur
Shangh
aiBeij
ingBan
gkok
Delhi
Jakar
taM
anila
Mumbai
GrossNet
Cities ranked according to gross value of index Source: UBS/Prices & Earnings, August 2011
CORPORATE INCOME TAX RATE
REDUCTION Reduction of corporate income tax rate
from 30% of net taxable profit to • 23% for the accounting year starting from 1
January 2012. • 20% for the accounting year starting from 1
January, 2013.
Source: Royal Decrees, ww.rd.go.th
Free Trade Agreement
Note: * Thailand Malaysia Indonesia Philippines Singapore and Brunei only
ASEAN •+570 million pop. •US$1.3 trillion GDP (2007)
ASEAN+3 •+2 billion pop. (1/3 world pop.) •US$9trillion GDP (16% of world GDP) ASEAN+6 •3.3 billion pop. (>50% world pop.) •US$12.25 trillion GDP
Infrastructure • 7 international airports In 2009, 53.9 million passengers, 1.1 million
tons of cargoes Suvarnabhumi Airport – Capacity: 45
million passengers and 3 million tons if cargo per year
• Over 70,000 km Highway Systems • 6 Deep Sea Ports & 2 International River Ports Laem Chabang Sea Port – Capacity: 10.8
million TEUs, with additional 8 million TEUs expansion
e-Customs facilities • 4,346 km Rail links to Malaysia & Singapore
Transnational RR linking China and SE Asia, covering 615 km at 200km/hr
Rail: 4,346 km rail links to Malaysia, Singapore; Mass Transit Master Plan (2010-2029) expansion plan for 508 km 2010-2029, while 122.8 km is scheduled to complete this year(2012)
Easy and Improving Transport
(15)
Modern Industrial Estates Thailand has over 60 Industrial estates, zones and parks nationwide
(16)
Efficient Logistics Network Seaport - Land Transport – Airport
Laem Chabang Deep Seaport
Donmuang International
Airport
Suvarnabhumi International
Airport
Map Ta Put Deep Seaport
Bangkok
GMS Infrastructure Development
Source: NESDB as of Jan 20,2009
North-South Corridor North-Eastern Corridor East-West Corridor Southern Corridor Central Corridor Southern Coastal Corridor
(18)
High stability and security of electricity Supply from both
public and private sources Promote
participation of the private sector in power generation
EGAT 14,998 MW 48%
IPP 12,081 MW 38%
SPP 2,174 MW 7%
Import & Exchange 2,185MW 7%
Total Capacity 31,451 MW Peak Demand 26,774 MW
Load Factor (Max) 83% Load Factor (Avg.) 75%
Source: Energy Planning and Policy Office
Security of Energy Supply 2012
(19)
IPR Framework • Thailand has 8 intellectual property-related laws, all of
which are consistent with international standards: • Copyright Act of 1994 • Patent Act of 1979, as amended by the Patent Act
(No.3) of 1999 • Trademark Act of 1991, as amended by the Trademark
Act (No.2) of 2000) • Act for the Protection of Layout-Designs of Integrated
Circuits 2000 • Trade Secret Act of 2002 • Protection of Geographical Indication Act of 2003 • Plant Varieties Protection Act of 1999 • Traditional Medicine and Practice Act of 1999
(20)
Investment Promotion Policy
(21)
No restrictions on foreign currency remittances
No export requirement
No foreign equity restrictions in manufacturing
sectors and promoted services sector
No local content requirement
Liberal Investment Policy
(22)
Tax Incentives Corporate income tax
holidays up to 8 yrs •Additional 50% reductions of corporate income tax for 5 yrs may apply in zone 3
Import duty reductions or exemptions on machinery and raw materials
Double deduction of public utility costs
Deductions for infrastructure construction/installation costs
Non-Tax Incentives Land ownership
rights for foreign investors
Permission to bring in foreign experts and technicians
Work permit/visa facilitation One-Stop-Shop Visas & Work Permits are issued in 3 hours
Basic BOI privileges and Measures
(23)
Zones Sector Matrix: Incentives to strengthen
competitiveness
Strategic or Priority Industries
Maximum incentives regardless of zone
(machinery import duties exemption, 8 years tax holiday) e.g. R&D, alternative energy, software, machinery, biotech,
aviation, hi-tech industry Zone-Based Incentives: Lower to higher Zone 1 → Zone 2 → Zone 3
Zone and Sector Matrix
U.S. INVESTMENT APPLICATIONS TOTALS BY SECTOR: 2006 – 2012 (JAN-APR)
Sector Projects US$ Million Agricultural Products 27 353.79
Minerals and Ceramics 3 11.81
Light Industries/Textiles 23 37.19
Metal Products and Machinery 58 1,811.08
Electric and Electronic Products 73 1,218.10
Chemicals and Paper 41 2,491.62 Services 54 174.69 TOTAL 279 6,098.28
Source: BOI, as of May 28, 2012 Note: Exchange rate: US$1=Bt31.0 in Q1, 2012
Success Stories of US Companies
Electronics & Electrical Industry Major Industrial Sector of Thailand
Electronics and Electrical Industry • Thailand is the 24th Export Rank in the World • E&E exports ~ US 53 Billion in 2011* • Thailand is the world’s largest producer of HDDs • A leading country in the manufacture of Integrated Circuits and White Goods
• Strong supporting industries for electrical appliances Compressors, motors, plastic and metal parts
Source:*Electrical and Electronics Institute, as of February’12
Thailand’s E&E Exports 2011
16,6668,200
3,3941,0311,356
2951,891
9557115911,118
0 5,000 10,000 15,000 20,000
Transistor & Diode
Capacitor & Resistor
Washing Machine
PCB
Camera TV, VDO
Telephone
Refrigerator
TV & Radio
Air Conditioner
IC
Computer & HDD
US$ Million
Source: Electrical and Electronics Institute
HDD
METAL/PLASTIC HSA
HGA
FPCA
SLIDERS
SUSPENSION
VOICE COIL MOTOR ASSY
SPINDLE MOTOR
PCBA IC
PCB
GLASS SUBSTRATES
WAFER
Existing Missing Link
MEDIA/PLATTER
Thailand #1 HDD Manufacturer HDD Cluster
Semiconductor Cluster in Thailand
Assembly
Testing
Lead
Frame IC Design Wafer
• Sumiko LeadFrame • TSP-T • Rohm Mechatech • Yamakin
• Microchip • NXP • Spansion • Hana Semiconductor • Circuit Electronics • Millennium Microtech • Utac Thai • Stars Microelectronics
• Microchip • Maxim Integrated
• StatsChipPac • Oki • Sony Device Technology • Sanyo Semiconductor • Rohm Integrated System • Toshiba Semiconductor • Thai NJR
• Rohm LSI • Silicon Craft Technology
Electronics and Electrical Cluster in Thailand
PRINTED
CIRCUIT BOARD
• NIPPON MEXTRON • CMK • KCE
PRINTED
CIRCUIT BOARD
ASSEMBLY
ELECTRONICS
AND ELECTRICAL
PRODUCT
• SANMINAR-SCI • CELESTICA • BENCHMARK • MURAMOTO • CALCOM • FUJIKURA
• SONY • LG • SAMSUNG • ELECTROLUX • FISHER&PAYKEL • TOSHIBA • SANYO • HEIER • NIKON • DAIKIN • HITACHI • MITSUBISHI • SHARP
32
Auto & Auto Parts Industries Thailand: Automotive Hub of Asia
33
• Largest auto producer in Southeast Asia, #12 largest in the world in 2010. Target to be #10 in the world
• World’s 2nd largest producer and market of pickup trucks
• Exports >50% to more than 150 countries • Strong Supporting Industry
– 635 suppliers of Tier 1 with combination of multinational, JV and domestics companies
– 1,700 suppliers of Tier 2,3 mainly domestics companies
• High Local content : 80-90% for pick up and 30-70% for passenger car
Thailand: Auto Hub of Asia
units
296,985
1,457,795
459,418584,951
750,512
1,645,304
1,287,346
928,081
559,428389,100
158,130
327,233411,721
1,125,3161,188,044
1,394,029
999,378 795,250
800,357
631,251
363,156 262,189
626,026
589,126
144,065218,330
409,362533,176
703,405682,161
682,161
548,871735,627
895,831
690,100
130,000
322,053
14,000 42,200 66,700152,836175,293180,554 239,440
440,715538,962
776,241
535,563
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Production Sale Export
Year 2011 Production = 1,457,795 Units
Domestic Sale = 795,250 Units Export = 735,627 Units
Thailand Automotive Industry Growth
Source : Thailand Auto Institute
Car Production in 2011-2012
38,601 71,28382,206
236,218
150,947
156,372
0
50,000
100,000
150,000
200,000
250,000
Asia Oceania MiddleEast
Africa Europe Central&SouthAmerica
1 Ton P/U Passenger Car PPV Total
Share of CBU Export by Type
Units Share
• 1 ton P/U = 491,153 67%
• P Car = 187,242 25%
• PPV = 57,232 8%
• Total = 735,627 100%
CBU Export by Region 2011
Brand 2012 Add Capacity 2015
Toyota 700,000 200,000 900,000 Ford & Mazda 500,000 - 500,000 Mitsubishi 400,000 100,000 500,000 Isuzu 220,000 100,000 320,000 Honda 240,000 - 240,000 Nissan 240,000 - 240,000 Suzuki 135,000 65,000 200,000 GM 160,000 - 160,000 Others 80,000 - 80,000 TOTAL 2,675,000 465,000 3,140,000
Estimate Production Capacity
Forecasted by TAI Feb 2012
• Engines – Diesels, Gasoline,
Motorcycles • Engines Components
– Starters, Alternators, Filters, Hoses, Gears, Flywheels
• Body Parts – Chassis, Bumpers, Fenders,
Hoods, Door Panels • Brake Systems
– Master Cylinders, Drums, Discs, Pads, Linings
• Steering Systems – Steering Wheels, Gears,
Columns, Pumps, Linkages
• Suspensions – Shocks, Coils, Ball Joints
• Transmissions – Gears, Casting, Rear Axles,
Drive Shafts, Propeller Shafts • Electrical/Electronics
– Alternators, Starters, Speedometers, Lamps, Motors, Flashers Relays
• Interiors/Exteriors – Seats, Mats, Weather Strips,
Console Boxes • Others
– Windshields, Seat Belts, Radiators, Wheels, Compressors
Parts Production in Thailand
Thailand Aviation Industry
Factors Supporting Thai Aviation Industry
Growing aviation industry Full support from the government : maximum
incentives from BOI Not much different technical standards among countries A capable and efficient skilled work force Cost-effective inputs Other support industries are widely available and
developed: stainless steel and aluminum fabrication, fiberglass application technology, and polymer supply
40
Major Companies in Thailand
42
Overseas offices
Country desks
1-Stop for visas & work permits: work permits in 3 hours
Interaction with other govt. agencies on behalf of investors
Industrial Subcontracting Services Global Sourcing program
(BUILD Unit)
Investment Matchmaking Program
ASEAN Supporting Industry Database
BOI SUPPORT SERVICES
(43)
Supports for US Investors BOI Office New York 61 Broadway, Suite 2810, New York NY 10008 USA Tel: (212) 422 9009 Fax: (212) 422 9119 E-mail: boiny@aol.com nyc@boi.go.th
BOI Office Los Angeles 611 North Larchmont Blv. 3rd Floor Los Angeles, CA 90004 USA Tel: (323) 960 1199 Fax: (323) 960 1190 Email: boila@sbcglobal.net
U.S. Desk @ BOI Headquarters 555 Vibhavadi-Rangsit Rd. Chatuchak, Bangkok 10900 Thailand Tel: (66 2) 537-8111 Fax: (66 2) 537-8098 E-mail: head@boi.go.th
Thank You!
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